The Trump administration appears to have scrapped one of the key tools the Obama administration used to encourage states to expand Medicaid under the Affordable Care Act.

By Robert PearThe New York Times

WASHINGTON — The Trump administration appears to have scrapped one of the key tools the Obama administration used to encourage states to expand Medicaid under the Affordable Care Act.

The shift involves funding that the federal government provides to help hospitals defray the cost of caring for low-income people who are uninsured. Under a deal with Florida, the federal government has tentatively agreed to provide additional money for the state’s “low-income pool,” a reversal of the previous administration’s policy.

The Obama administration balked at providing more money to help hospitals cope with the costs of “uncompensated care” for people who could be covered by Medicaid. If Florida expanded Medicaid eligibility, the Obama administration said, fewer people would be uninsured, and hospitals would have less uncompensated care.

Under the Obama administration, the amount of the Florida low-income pool fell to $608 million a year, from $1 billion. Gov. Rick Scott, a Republican who had pushed for years to bolster the state’s low-income pool, and the Trump administration recently announced that the pool would grow to $1.5 billion a year.

Scott welcomed the tentative agreement as one of the first examples of the new freedom and flexibility promised to states by the Trump administration.

“Florida was on the front line of fighting against federal overreach under President Obama,” he said, “and it is refreshing to now have a federal government that treats us fairly and does not attempt to coerce us into expanding Medicaid.”

Trump administration officials say that the expansion of Medicaid under the Affordable Care Act is not a good use of taxpayer dollars and that there are better ways to provide health care for low-income people. But former Obama administration officials said the change on low-income pools was misguided.

“Florida is just being paid by taxpayers not to expand Medicaid,” said Andrew M. Slavitt, the acting administrator of the Centers for Medicare and Medicaid Services from March 2015 to January of this year. “The low-income pool is essentially a slush fund,” Slavitt said, “and it’s a really inefficient way to pay for medical care.”

Jessica Schubel, who worked at the Medicaid agency under President Barack Obama, said the action planned by the Trump administration was “a sharp departure from principles that the Centers for Medicare and Medicaid Services” had been following.

In a letter to Florida’s top Medicaid official in May 2015, the Obama administration said: “Coverage is the best way to secure affordable access to health care for low-income individuals. Uncompensated care pool funding should not pay for costs that would be paid for in a Medicaid expansion.”

Florida is one of 19 states that have not expanded Medicaid under the Affordable Care Act. In a report last week, the Urban Institute estimated that 730,000 to 900,000 people would gain coverage if it did. Of the 20 million people insured as a result of the Affordable Care Act, more than half have gained coverage through the expansion of Medicaid.

The Trump administration supports a House Republican bill that would repeal major provisions of the 2010 health law and eliminate funds for the expansion of Medicaid. The Congressional Budget Office estimates that the House repeal bill would reduce Medicaid spending by $839 billion in the coming decade, compared with the amount that would be spent under current law. Fourteen million fewer people would be covered by Medicaid, the office says.

Tom Price, the secretary of health and human services, has said that Medicaid has “real problems,” asserting, for instance, that one-third of doctors in the United States do not take Medicaid patients. At a recent town hall forum on CNN, Price was confronted by a cancer survivor who said he was alive because of the expansion of Medicaid. Price said the man’s experience was “not necessarily true for everybody.”

Brian Blase, a special assistant to President Donald Trump for health care policy, has cataloged the Medicaid problems in several recent essays. In states that expanded Medicaid, he said, enrollment has substantially exceeded expectations, and spending for the new beneficiaries is “significantly above projections.”“Expanding Medicaid was an unwise policy decision made by the drafters of the ACA,” Blase wrote in Forbes in November. “The program needed reform, not expansion.”Medicaid covers care for low-income people. The federal government and states have historically shared the costs, with the federal share averaging 57 percent. But the federal government pays a much larger share — at least 90 percent of the costs — for adults who qualify for Medicaid because of the expansion of eligibility under the Affordable Care Act.

The Trump administration has not formally announced a new policy on Medicaid, but the change is evident in the “terms and conditions” of the agreement it is negotiating with Florida.

The top Democrats on the congressional committees responsible for Medicaid, Sen. Ron Wyden of Oregon and Rep. Frank Pallone Jr. of New Jersey, have expressed concern about the deal with Florida, which is envisioned as part of a Medicaid waiver. It is not clear how the waiver would “promote the objectives” of the Medicaid program, as required by federal law, they said in a letter to Seema Verma, the new administrator of the Centers for Medicare and Medicaid Services.

Two House Democrats from Florida, Debbie Wasserman Schultz and Kathy Castor, said that after receiving the commitment of federal funds, the Florida Legislature was now moving to adopt a budget that includes cuts in state Medicaid spending. “It’s outrageously irresponsible,” Wasserman Schultz said.

Castor said that “it would be more efficient to expand Medicaid so people would have coverage, rather than running up huge bills at hospitals that need to seek reimbursement from the low-income pool.”